DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
The Lexington Growth and Income Fund appreciated by 30.36%* for the year
ended December 31, 1997. This compares to a 26.99% return for the average growth
and income fund monitored by Lipper Analytical Services, Inc. during the period.
Contributing to the Fund's above average performance during the year were
significant weightings in the energy, pharmaceutical and financial sectors. In
the fourth quarter, the Fund's retail exposure provided a boost to performance.
In addition, as the crisis in Asia became apparent, we acted quickly to reduce
the Fund's exposure to that sector, thus minimizing the negative effect on the
Fund.
Stocks turned in a record performance in 1997 with the Dow Jones
Industrial Average rising 24.9%, the first time in history that the index
increased 20% or more for three consecutive years. The market turned decidedly
more volatile in the second half and since the beginning of August actually
declined 3.1%. The chief culprit for the change in sentiment was the unfolding
currency and economic crisis in several Asian and other emerging economies.
Economic conditions in the U.S. are quite good, maybe even too good to
keep the Federal Reserve from raising interest rates. The labor market is very
tight with unemployment at the lowest rate in 25 years and wage rates continuing
to creep upward. Economic growth has remained above the Fed's stated target
range. Thus, despite continued low reported inflation rates, domestic conditions
could very likely tempt the Fed to raise rates, at least modestly.
The U.S. economy, however, does not exist in a vacuum. The events in Asia
this fall, will have significant effects on the world economies. The "Asian
Tiger" economies, together with China and Japan, had represented one of the
fastest growing regions of the world. As a result of the currency and market
upheavals, and the heavy dose of International Monetary Fund "medicine", many of
these economies will likely be in recession through 1998. The most severe
effects should be felt elsewhere in Asia, mainly in China and Japan which have
extensive trade relationships in the region. Less affected will be the major
economies of Europe. Given the relatively low trade and high services components
of our economy, the U.S. should be only moderately affected.
The dramatic devaluation of several Asian currencies also has the effect
of significantly reducing the cost of goods produced elsewhere. For example, a
pulp producer in the U.S. or Europe now has to sell into world markets against
very low cost producers in Asia. The net result of these factors will be reduced
growth and inflation pressures around the world. While the U.S. is likely to be
less affected than many other countries, we are not totally immune to the "Asian
Flu." Lower growth and reduced inflation pressures are just what the Fed wants.
Thus, it could be argued that Asia has done the Fed's work for them. Perversely,
the need to prop up ailing economies could actually lead the Fed to cut rates,
perhaps in coordination with other Central Banks. This possibility has helped
drive interest rates to new lows.
Although growth may be slowed somewhat in the U.S., the economy remains
quite strong and current low interest rates will help sustain that growth. The
larger issue for investors will be the outlook for corporate earnings. Analyst
estimates for 1998 appeared too optimistic to us even before the Asian crisis.
Estimates have already begun to come down for the fourth quarter of 1997, but
have yet to drop materially for 1998. As estimates are reduced over the next few
months the market will likely remain volatile. On the other hand, lower interest
rates provide a floor under stock prices preventing a significant decline. The
key to performance in this environment will be avoiding significant earnings
disappointments. Our Fund is well represented with
1
<PAGE>
predictable earnings companies such as healthcare, consumer staple and
domestically oriented financial, technology and economically sensitive issues.
By the second half of the year we believe the environment could flip
around. By then, economic conditions around the world should stabilize and
earnings expectations will have been reduced to more realistic levels. With the
U.S. economy still on a moderate growth track, interest rates will likely be
somewhat higher. Altogether probably a healthier backdrop for stocks.
We appreciate your continued support and welcome the opportunity to
discuss any questions you may have about your investment.
Sincerely,
/s/ Alan H. Wapnick /s/ Robert M. DeMichele
- ---------------------- ---------------------------
Alan H. Wapnick Robert M. DeMichele
Portfolio Manager President
February, 1998 February, 1998
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
LEXINGTON GROWTH AND INCOME FUND, INC. AND
THE UNMANAGED STANDARD & POOR'S 500 STOCK PRICE INDEX
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED REPORT]
Year Growth and Income S&P 500
12/31/87 $10,000 $10,000
12/31/88 $10,946 $11,655
12/31/89 $13,963 $15,343
12/31/90 $12,529 $14,867
12/31/91 $15,645 $19,387
12/31/92 $17,580 $20,862
12/31/93 $19,903 $22,961
12/31/94 $19,284 $23,261
12/31/95 $23,636 $32,003
12/31/96 $29,889 $39,354
12/31/97 $38,962 $52,487
AVERAGE ANNUAL STANDARD TOTAL RETURNS
FOR THE PERIOD ENDED 12/31/97
FUND/INDEX 1 YEAR 5 YEAR 10 YEAR
- ---------- ------ ------ -------
LEXINGTON GROWTH
AND INCOME FUND 30.36% 17.25% 14.57%
S & P 500 33.37% 20.27% 18.05%
This graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund with a similar investment in the Standard & Poor's 500
Stock Index ("S&P 500"). Results for the Fund, and the S&P 500 include the
reinvestment of all dividend and capital gain distributions. Investment return
and principal value of an investment will fluctuate so that an investor's shares
when redeemed may be worth more or less than at their original cost. Total
return represents past performance and it is not predictive of future results.
- --------------------------------------------------------------------------------
*30.36%, 17.25% and 14.57% are the one, five and ten year average annual
standard total returns, respectively, for the period ended December 31, 1997.
Investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than at their
original cost. Total return represents past performance and is not predictive
of future results.
2
<PAGE>
LEXINGTON GROWTH AND INCOME FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
December 31, 1997
NUMBER VALUE
OF SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCK: 97.2%
BANKING: 2.5%
85,500 Union Planters Corporation ... $ 5,808,656
------------
CAPITAL EQUIPMENT: 7.3%
130,000 Cymer, Inc.1 ................. 1,954,062
145,000 Dover Corporation ............ 5,238,125
104,100 Ingersoll-Rand Company ....... 4,216,050
85,000 Sealed Air Corporation1 ...... 5,248,750
------------
16,656,987
------------
CONSUMER DURABLE GOODS: 2.1%
170,600 EMC Corporation1 ............. 4,680,837
------------
CONSUMER NONDURABLE GOODS: 3.3%
115,400 PepsiCo, Inc. ................ 4,204,887
54,000 Unilever NV1 ................. 3,371,625
------------
7,576,512
------------
DRUGS: 2.1%
65,000 Pfizer, Inc. ................. 4,846,562
------------
ENERGY SOURCES: 8.9%
65,000 BJ Services Company1 ......... 4,675,937
76,300 Diamond Offshore Drilling, Inc. 3,671,937
51,800 Mobil Corporation ............ 3,739,312
66,000 Texaco, Inc. ................. 3,588,750
124,500 Tosco Corporation ............ 4,707,656
------------
20,383,592
------------
FINANCIAL SERVICES: 20.5%
63,000 Ace, Ltd. .................... 6,079,500
56,000 Allstate Corporation ......... 5,089,000
98,500 Conseco, Inc. ................ 4,475,594
97,000 Federal National Mortgage
Association ............... 5,535,062
69,000 Foremost Corporation of America 4,812,750
102,000 NAC Re Corporation ........... 4,978,875
74,000 NationsBank Corporation ...... 4,500,125
168,000 Norwest Corporation .......... 6,489,000
88,700 UNUM Corporation ............. 4,823,063
------------
46,782,969
------------
HEALTH & PERSONAL CARE: 12.5%
62,000 Bristol-Myers Squibb Company . $ 5,866,750
66,000 Cardinal Health, Inc. ........ 4,958,250
68,800 Eli Lilly & Company .......... 4,790,200
112,000 Medtronic, Inc. .............. 5,859,000
80,000 United Healthcare Corporation 3,975,000
24,000 Warner-Lambert Company ....... 2,976,000
------------
28,425,200
------------
HOUSEHOLD PRODUCTS: 2.5%
70,200 Procter & Gamble Company ..... 5,602,838
------------
NUMBER VALUE
OF SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------
MATERIALS: 3.6%
114,000 Fort James Corporation ....... 4,360,500
84,000 Praxair, Inc. ................ 3,780,000
------------
8,140,500
------------
MERCHANDISING: 16.4%
176,000 Borders Group, Inc.1 ......... 5,511,000
128,000 Costco Companies, Inc.1 ...... 5,708,000
166,500 Gap, Inc. .................... 5,900,344
76,500 Home Depot, Inc. ............. 4,503,938
89,000 Rite Aid Corporaton .......... 5,223,188
100,000 Safeway, Inc.1 ............... 6,325,000
121,000 The TJX Companies, Inc.1 ..... 4,159,375
------------
37,330,845
------------
MULTI-INDUSTRY: 4.8%
101,600 AlliedSignal, Inc. ........... 3,956,050
153,000 Tyco International, Ltd. ..... 6,894,563
------------
10,850,613
------------
SERVICES: 10.7%
66,100 Computer Associates
International, Inc. ........ 3,495,038
61,300 Ecolab, Inc. ................. 3,398,319
231,200 Global Industries, Ltd.1 ..... 3,937,625
153,500 Sungard Data Systems, Inc.1 .. 4,758,500
55,000 The Walt Disney Company ...... 5,448,438
121,800 Williams Companies, Inc. ..... 3,456,075
------------
24,493,995
------------
TOTAL COMMON STOCK
(cost $166,907,754) .......... 221,580,106
------------
SHORT-TERM INVESTMENTS: 3.9%
U.S. Government Agency Obligations
$9,000,000 Federal Home Loan Mortgage
Corporation
4.75%, due 01/02/98
(cost $8,998,813) ......... $ 8,998,813
------------
TOTAL INVESTMENTS: 101.1%
(cost $175,906,567+) (Note 1). $230,578,919
============
Liabilities in excess of other assets:
(1.1%) ..................... (2,541,755)
------------
TOTAL NET ASSETS: 100.0%
(equivalent to $20.27 on
11,248,389
shares outstanding) ....... $228,037,164
============
- ----------
1 Non-income producing security.
+ Aggregate cost for Federal income tax purposed is identical.
The Notes to Financial Statements are an integral part of this statement.
3
<PAGE>
<TABLE>
<CAPTION>
LEXINGTON GROWTH & INCOME FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997
<S> <C>
ASSETS
Investments, at value
(cost $175,906,567) (Note 1) ................................................. $230,578,919
Cash ........................................................................... 506,473
Receivable for investment securities sold ...................................... 1,080,834
Receivable for shares sold ..................................................... 157,239
Dividends and interest receivable .............................................. 134,159
------------
Total Assets ............................................................ $232,457,624
------------
LIABILITIES
Due to Lexington Management Corporation
(Note 2) ..................................................................... 121,199
Payable for investment securities purchased .................................... 266,688
Payable for shares redeemed .................................................... 174,415
Distributions payable .......................................................... 3,671,041
Accrued expenses ............................................................... 187,117
------------
Total Liabilities ....................................................... 4,420,460
------------
NET ASSETS (equivalent to $20.27 per share on
11,248,389 shares outstanding)(Note 4) ....................................... $228,037,164
============
NET ASSETS consist of:
Capital stock--authorized 1,000,000,000 shares,
$.001 par value per share .................................................... $ 11,248
Additional paid-in capital (Note 1) ............................................ 171,444,930
Accumulated net realized gain on investments
(Note 1) ..................................................................... 1,908,634
Unrealized appreciation on investments ......................................... 54,672,352
------------
TOTAL NET ASSETS ............................................................... $228,037,164
============
LEXINGTON GROWTH & INCOME FUND, INC
STATEMENT OF OPERATIONS
Year ended December 31, 1997
INVESTMENT INCOME
Dividends ...................................................................... $ 2,495,415
Interest ....................................................................... 548,009
------------
3,043,424
Less: foreign tax expense ...................................................... 10,720
------------
Total investment income ................................................... $ 3,032,704
EXPENSES
Investment advisory fee (Note 2) ............................................ 1,403,527
Distribution expense (Note 3) ............................................... 474,205
Transfer agent and shareholder servicing
expense (Note 2) .......................................................... 230,698
Accounting expenses (Note 2) ................................................ 155,384
Printing and mailing expenses ............................................... 67,970
Professional fees ........................................................... 52,373
Registration fees ........................................................... 34,432
Custodian expense ........................................................... 26,542
Computer processing fees .................................................... 20,462
Directors' fees and expenses ................................................ 18,107
Other expenses .............................................................. 81,884
------------
Total expenses ............................................................ 2,565,584
------------
Net investment income ................................................... 467,120
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
(NOTE 5)
Net realized gain on investments ............................................... 35,330,683
Net change in unrealized appreciation on
investments .................................................................. 20,980,248
------------
Net realized and unrealized gain on
investments .................................................................. 56,310,931
------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................................................. $ 56,778,051
============
The Notes to Financial Statements are an integral part of these statements.
4
</TABLE>
<PAGE>
LEXINGTON GROWTH AND INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Years ended December 31, 1997 and 1996
1997 1996
------------- -------------
Net investment income ..................... $ 467,120 $ 712,927
Net realized gain from investments ........ 35,330,683 14,853,714
Net change in unrealized
appreciation of investments ............. 20,980,248 22,564,960
------------- -------------
Net increase in net assets
resulting from operations ........... 56,778,051 38,131,601
Distributions to shareholders from
net investment income ................... (691,040) (1,197,624)
Distributions to shareholders from net
realized gains from security transactions (36,280,960) (11,924,849)
Increase in net assets from
capital share transactions
(Note 4) ................................ 7,922,045 36,399,400
------------- -------------
Net increase in net assets .............. 27,728,096 61,408,528
NET ASSETS:
Beginning of period ..................... 200,309,068 138,900,540
------------- -------------
End of period (including undistributed
net investment income of $0, 1997 and
1996, respectively)(Note 1) ........... $ 228,037,164 $ 200,309,068
============= =============
The Notes to Financial Statements are an integral part of these statements
LEXINGTON GROWTH AND INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
1. SIGNIFICANT ACCOUNTING POLICIES
Lexington Growth and Income Fund, Inc. (the "Fund") is an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended. The Fund's investment objective is long-term appreciation of
capital. Income is a secondary objective. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements:
INVESTMENTS Security transactions are accounted for on a trade date basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked price is used. Securities traded on the over-the-counter market are valued
at the mean between the last current bid and asked price. Short-term securities
having a maturity of 60 days or less are stated at amortized cost, which
approximates market value. Securities for which market quotations are not
readily available and other assets are valued by Fund management in good faith
under the direction of the Fund's Board of Directors. All investments quoted in
foreign currencies are valued in U.S. dollars on the basis of the foreign
currency exchange rates prevailing at the close of business. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income, adjusted for amortization of premiums and accretion of discounts, is
accrued as earned.
FEDERAL INCOME TAXES It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to "regulated investment
companies" and to distribute all of its taxable income to its shareholders.
Therefore, no provision for Federal income taxes is required.
DISTRIBUTIONS Dividends from net investment income are normally declared
and paid quarterly and dividends from net realized capital gains are normally
declared and paid annually. However, the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. The character of income and gains to be distributed are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. At December 31, 1997, reclassifications were
made to the Fund's capital accounts to reflect permanent book/tax differences
and income and gains available for distribution under income tax regulations.
Net investment income, net realized gains and net assets were not affected by
this change.
USE OF ESTIMATES The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
2. INVESTMENT ADVISORY
FEE AND OTHER TRANSACTIONS WITH AFFILIATE
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 0.75% of the Fund's average daily net assets up to
$100 million and in decreasing stages to 0.40% of average daily net assets in
excess of $250 million. For 1997, LMC has agreed to voluntarily limit the total
expenses of the Fund (excluding interest, taxes, brokerage commissions and
extraordinary expenses but including management fees and operating expenses) to
an annual rate of 2.50% of the Fund's average net assets. No reimbursement was
required for the year ended December 31, 1997. The Fund reimbursed LMC for
certain expenses, including accounting and shareholder servicing costs of
$354,153 which are incurred by the Fund, but paid by LMC.
3. DISTRIBUTION PLAN
The Fund has a Distribution Plan (the "Plan") which allows payments to finance
activities associated with the distribution of the Fund's shares. The Plan
provides that the Fund may pay
5
<PAGE>
LEXINGTON GROWTH AND INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996 (continued)
distribution fees on a reimbursement basis, including payments to Lexington
Funds Distributor, Inc. ("LFD"), the Fund's distributor, in amounts not
exceeding 0.25% per annum of the Fund's average daily net assets. Total
distribution expenses for the year ended December 31, 1997 were $474,205 and are
set forth in the statement of operations.
4. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Year ended
December 31, 1997 December 31, 1996
------------------------------ ---------------------------
Shares Amount Shares Amount
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold ......... 1,769,495 $ 37,859,449 3,754,824 $ 69,417,382
Shares issued on
reinvestment of
dividends ......... 1,653,833 32,896,215 615,141 11,475,109
---------- ----------- ---------- -----------
3,423,328 70,755,664 4,369,965 80,892,491
Shares redeemed ..... (2,965,147) (62,833,619) (2,423,985) (44,493,091)
---------- ------------ ---------- ------------
Net increase ...... 458,181 $ 7,922,045 1,945,980 $ 36,399,400
========== ============ ========== ============
</TABLE>
5. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales of securities for the year ended
December 31, 1997, excluding short-term securities, were $185,974,101 and
$213,678,083, respectively.
At December 31, 1997, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$57,348,687 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $2,676,335.
6. INVESTMENT AND CONCENTRATION RISKS
The Fund's ability to invest in foreign securities may involve risks not present
in domestic investments. Since foreign securities may be denominated in a
foreign currency and involve settlement and pay interest or dividends in foreign
currencies, changes in the relationship of these foreign currencies to the U.S.
dollar can significantly affect the value of the investments and earnings of the
Fund. Foreign investments may also subject the Fund to foreign government
exchange restrictions, expropriation, taxation or other political, social or
economic developments, all of which could affect the market and/or credit risk
of the investments.
7. TAXATION INFORMATION (UNAUDITED)
The percentage of investment company taxable income eligible for the dividends
received deduction available to certain corporate shareholders with respect to
the year ended, December 31, 1997, is 34.7%.
Capital gain distributions paid to shareholders by the Fund during the year
ended December 31, 1997, whether taken in shares or cash: $7,716,008 are
designated as 28 percent long-term capital gain and $19,211,320 are designated
as 20 percent long-term capital gain.
================================================================================
FINANCIAL HIGHLIGHTS
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $18.56 $15.71 $14.36 $16.16 $16.25
------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income ................................... 0.05 0.07 0.22 0.17 0.21
Net realized and unrealized gain (loss) on investments .. 5.46 4.08 3.00 (.68) 1.94
------ ------ ------ ------ ------
Total income (loss) from investment operations ............ 5.51 4.15 3.22 (.51) 2.15
Less distributions:
Dividends from net investment income .................... (0.07) (0.13) (0.22) (0.16) (0.21)
Distributions from net realized gains ................... (3.73) (1.17) (1.65) (0.91) (2.03)
Distributions in excess of net realized gains
(temporary book-tax difference) ....................... -- -- -- (.22) --
------ ------ ------ ------ ------
Total distributions ....................................... (3.80) (1.30) (1.87) (1.29) (2.24)
------ ------ ------ ------ ------
Net asset value, end of period ............................ $20.27 $18.56 $15.71 $14.36 $16.16
====== ====== ====== ====== ======
Total return .............................................. 30.36% 26.46% 22.57% (3.11%) 13.22%
Ratios to average net assets:
Expenses ................................................ 1.17% 1.13% 1.09% 1.15% 1.29%
Net investment income . ................................. 0.21% 0.43% 1.38% 1.06% 1.20%
Portfolio turnover ........................................ 88.15% 101.12% 159.94% 63.04% 93.90%
Average commissions paid per share on equity
securities transactions* ............................... $ 0.07 $ 0.07 -- -- --
Net assets at end of period (000's omitted) ............... $228,037 $200,309 $138,901 $124,289 $134,508
</TABLE>
*In accordance with SEC disclosure guidelines, the average commission is
calculated for the periods beginning with the year ended December 31, 1996, but
not for prior periods.
6
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Lexington Growth and Income Fund, Inc.:
We have audited the accompanying statements of net assets (including the
portfolio of investments) and assets and liabilities of Lexington Growth and
Income Fund, Inc. as of December 31, 1997, the related statement of operations
for the year then ended, the statements of changes in net assets for each of the
years in the two-year period then ended, and the financial highlights for each
of the years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997 by correspondence with the custodian. As to securities
purchased or sold, but not yet received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Lexington Growth and Income Fund, Inc. as of December 31, 1997, the results of
its operations for the year then ended, the changes in its net assets for each
of the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 4, 1998
7
<PAGE>
LEXINGTON
GROWTH AND INCOME FUND, INC.
INVESTMENT ADVISER
- --------------------------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
DISTRIBUTOR
- --------------------------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
- --------------------------------------------------------------------------------
ALL SHAREHOLDER REQUESTS FOR SERVICES OF ANY KIND SHOULD BE SENT TO:
TRANSFER AGENT
- --------------------------------------------------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
OR CALL TOLL FREE:
SERVICE AND SALES: 1-800-526-0056
24 HOUR ACCOUNT INFORMATION:
1-800-526-0052
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(800) 526-0052
"LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield o Account Balances o Exchanges o
Last Transactions o Total Return o Duplicate Statements
- --------------------------------------------------------------------------------
This report has been prepared for the information of the shareholders of
Lexington Growth and Income Fund, Inc. and is authorized for distribution to the
public only if it is accompanied or preceded by a currently effective prospectus
which sets forth expenses and other material information.
LEXINGTON
- --------------------------------------------------------------------------------
================================================================================
LEXINGTON
GROWTH
AND
INCOME
FUND, INC.
- --------------------------------------------------------------------------------
Seeks capital appreciation over the
long term through investments in
the stocks of large, ably managed
and well financed companies.
- --------------------------------------------------------------------------------
ANNUAL REPORT
DECEMBER 31, 1997
The Lexington Group
of No Load
Investment Companies
================================================================================
